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The study provides an insight on the regulatory requirements that banks have been complying with since the financial crisis of 2009. Precisely, it focuses upon the Bank Recovery and Resolution Directive's full implementation and effectiveness. An empirical analysis on the European banks' CDS market sheds light on the mechanisms driving its current and historical developments, emphasizing the motivations for the change in the regulatory architecture. The policies will be proved to be effective in changing investors' risk perception, that is, a shift of risk burden from senior bondholders towards subordinated debt holders, as well as a breakdown of the link between banks and sovereigns' default probabilities, the so-called doom loop. Ultimately, a comparative analysis on banks' capital requirements, return on equity, leverage and risk weighted assets provides evidence on the impact regulations have on the European banks' business strategies, thereby shaping the New Normal. In conclusion, the paper discusses whether the current regulatory regime will be able to prevent future sources of instability. [ABSTRACT FROM AUTHOR]